Freddie Mac’s 30-year average hit 7.40% in mid-October 2026, the highest since late 2023, before easing to 7.24% on October 29. At those rates, refinancing is a narrower bet than it was a year ago, so the fees matter more than ever. A typical refinance carries about $2,200 to $2,400 in title, settlement, recording and tax charges alone, according to LodeStar’s 2024 and 2025 data, and the federal HMDA data put the median refinance’s total loan costs, points included, at $7,329 in 2023.
The two numbers measure different parts of the same bill. The fastest way to see where your money goes is to take one Loan Estimate apart and mark each line fixed, shoppable or optional. If you are also buying a home soon, our closing costs calculator handles the purchase side.
A sample refinance Loan Estimate, taken apart
This is a hypothetical example, not a real quote: a $340,000 rate-and-term refinance, close to the $339,579 average in LodeStar’s 2024 study, with each line drawn from a published national figure. Section letters match page two of the standard Loan Estimate.
| Loan Estimate line (example) | Amount | Basis | Verdict |
|---|---|---|---|
| A. Origination and underwriting | $1,500 | Bankrate: 0.5% to 1.5% of the loan | Negotiable |
| A. One discount point (optional) | $3,400 | About 1% of the loan per point | Optional; test the break-even |
| B. Appraisal | $550 | Fannie Mae’s average savings per waived appraisal | Ask about a waiver |
| B. Credit report | $25 | Typically under $30 | Fair |
| C. Title insurance and settlement | $1,870 | LodeStar 2024 national average | Shop it |
| E. Recording fees and taxes | $533 | LodeStar 2024 average, by subtraction | Fixed by government |
| Total without the point | $4,478 | About 1.3% of the loan | |
| Total with the point | $7,878 | About 2.3% of the loan |
Bankrate’s rule of thumb is 2% to 5% of the new loan, or $6,800 to $17,000 at this size. Quotes near the top of that range usually include points, a heavy state mortgage tax, or both.
Section A is the only money the lender keeps
Everything in Section A goes to the lender, which makes it the most negotiable part of the form. Some lenders list one origination fee; others split it into application, processing, underwriting and “administration” charges. Bankrate puts application fees at up to $500 and origination at 0.5% to 1.5% of the loan. Compare the Section A total, since a lender with no origination fee can still charge plenty for processing.
Discount points also live here, and they are the line most borrowers misread. In the HMDA data, about two-thirds of 2023 refinances included points, with a median outlay of $3,902. A point is prepaid interest: Bankrate says each one costs about 1% of the loan and typically lowers the rate by roughly 0.25 percentage point.
In the example, paying $3,400 to drop from 7.25% to 7.00% cuts the monthly principal and interest from $2,319 to $2,262, a $57 saving. That takes 59 months, almost five years, to repay. If rates fall in 2027 and you refinance again, the point is gone. Many lenders advertise their rates with points already baked in, so check Section A before you compare headline rates.
The median refinance in 2023 carried $7,329 in total loan costs, up from $4,979 a year earlier, as more borrowers paid points to soften higher rates.
CFPB analysis of 2023 HMDA data, via National Mortgage News
Sections B and C: the appraisal and title lines you can shrink
Section B lists services the lender picks for you, such as the appraisal, credit report and flood certification. Section C lists services you are allowed to shop for, chiefly title and settlement. The form says so in plain words, and few borrowers act on it.
The appraisal. Bankrate quotes $300 to $1,000. Fannie Mae and Freddie Mac can accept the property value without a full appraisal on some refinances, using their own data. Fannie Mae estimates these alternatives have saved borrowers about $3 billion since 2018, or roughly $550 a loan. You cannot demand a waiver, since the automated underwriting system decides, but you can ask the loan officer if your file qualified before an appraisal is ordered.
Title insurance. A refinance needs a new lender’s title policy even though nobody new owns the house. You do not need a new owner’s policy, since the one from your purchase still protects you. Bankrate puts title services at $300 to $2,000. Two habits trim this line:
- Ask the title company for its reissue or refinance rate. Many states’ rate filings discount the lender’s policy when the property was insured recently, often within the past several years. The discount is rarely applied unless someone asks.
- Get a second title and settlement quote. If you pick a provider from the lender’s written list, the lender’s estimate for those fees can rise only within limits set by federal disclosure rules. If you choose your own provider, those fees are no longer capped, so make sure the savings hold up at closing.
Section E and your ZIP code: the part no one can negotiate
Recording fees and state or local taxes are set by government, and they explain most of the gap between states. LodeStar’s 2024 refinance study found New York borrowers paying about three times the national average, largely because of its mortgage recording tax. Missouri, with no such tax, was the cheapest state in dollars.
| Where you live | Average refinance closing costs, 2024 | Share of loan amount |
|---|---|---|
| Washington, D.C. | $6,773 | 1.19% |
| New York | $6,565 | 2.1% |
| National average | $2,403 | 0.72% |
| Utah | $1,933 | 0.40% |
| California | $1,746 | 0.33% |
| Maine | $1,424 | 0.44% |
| Missouri | $1,196 | 0.45% |
Florida, Maryland and Pennsylvania also ranked high because of taxes on recording the new mortgage. If Section E looks inflated, your county recorder’s posted fee schedule settles it.
Prepaids and escrow look like costs, but most of it is your own money
Sections F and G can double the “cash to close” figure. They hold prepaid interest through month-end, any insurance premium coming due and a deposit to start the new escrow account. None of it is a fee: the interest is owed on any loan, and escrow pays your own tax and insurance bills.
Your old servicer also owes you money back. Federal mortgage servicing rules require the old servicer to refund the balance of your escrow account within 30 days after the loan is paid off. With a year of property taxes in escrow, that check can be large.
Why does the refinance seem to let me skip a payment?
Mortgage interest is paid in arrears. The old loan’s payoff includes interest up to closing day, the new loan collects prepaid interest through month-end, and the first new payment falls a month or more later. Nothing was skipped; you paid that interest at closing, often by adding it to the new balance.
What a “no-closing-cost” refinance charges instead
A no-closing-cost refinance does not erase the fees. Either the lender covers them with a credit in exchange for a higher rate, or the fees get rolled into the balance. Only the first is truly no-cost at closing.
Back to the example. Suppose the lender offers 7.50% with a credit large enough to pay the $4,478 in fees, against 7.25% with you paying them. The higher rate costs $2,377 a month instead of $2,319, or $58 more. You come out ahead with the credit for about 77 months, roughly six and a half years. After that, the lower rate wins. How much rate a lender charges for the credit varies widely, so ask every lender for a no-cost option alongside its standard quote.
At 7%-plus rates the credit has one more advantage: if rates drop in 2027, you can refinance again without having sunk thousands into this loan. For borrowers leaving a late-2023 loan near Freddie Mac’s 7.79% peak, that flexibility can be worth more than a quarter point.
Is the refinance worth doing at all? In the example, moving a $340,000 balance from 7.79% to 7.25% saves about $126 a month. At $4,478 in fees, that pays back in roughly 36 months. Note that the 30-year clock restarts too, so the payment drop overstates the long-run savings if you were already several years in.
FHA streamlines and VA IRRRLs: lighter paperwork, their own fees
Government-backed loans have their own refinance routes that skip the appraisal, and that changes the anatomy.
- VA Interest Rate Reduction Refinance Loan (IRRRL). No appraisal is required, and the VA funding fee is 0.5% of the loan, or $1,700 on $340,000. Veterans who receive VA disability compensation are exempt. Lenders must show that the fees are recouped through lower payments within 36 months. A bill in Congress, H.R. 9237, would raise the IRRRL fee, but as of November 2026 it had not passed, so 0.5% still applies for 2027 planning.
- FHA streamline refinance. Usually no appraisal, but a new 1.75% upfront mortgage insurance premium applies, partly offset by a refund of the old premium if your FHA loan is under three years old. Annual premiums continue, so compare a conventional refinance if you now have 20% equity.
The 2027 conforming loan limit, the line between standard and jumbo pricing, had not been announced by early November 2026. The 2026 limit in most counties is $832,750, and the FHFA usually publishes the next figure in late November. If your balance sits near the line, ask which limit your lender is using.
Lining up two Loan Estimates in 20 minutes
Request Loan Estimates from three lenders on the same day, for the same amount, term and lock period, then work in this order:
- Confirm the rate, the lock period and whether points are included. A lower rate with 1.5 points is a different product from a higher rate with none.
- Add up Section A on each estimate. This is the cleanest lender-to-lender comparison on the form.
- Ignore differences in Sections F and G. They reflect closing dates and escrow assumptions, not price.
- Check Section C for an owner’s title policy, a survey or duplicate settlement fees. Ask for any of them to be removed or explained.
- Look at the lender credits line. If one lender offers a credit and another does not, ask the second to match.
- Divide total fees (Sections A through E, minus credits) by the monthly saving against your current payment. That is your break-even in months.
Refinance fee questions people ask their loan officer
Can I roll refinance closing costs into the new loan?
Usually, yes, if you have enough equity. The fees are added to the balance, so you pay interest on them for the life of the loan. On a $340,000 loan at 7.25%, financing $4,478 in fees adds about $31 a month for 30 years, which is often more expensive over time than taking a lender credit.
Does shopping for a refinance hurt my credit score?
Each lender pulls your credit, but FICO scoring models treat multiple mortgage inquiries within a short window as a single inquiry. Newer FICO versions use a 45-day window and older ones 14 days, so do your rate shopping within about two weeks to be safe.
Are refinance points and closing costs tax deductible?
Under IRS rules, points paid on a refinance are generally deducted over the life of the loan rather than all in the year you pay them, and only if you itemize. Most other closing costs are not deductible. Check IRS Publication 936 and confirm your situation with a tax professional.
Do I need a new homeowners insurance policy to refinance?
No. Your existing policy continues, but your insurer must list the new lender as mortgagee, and the lender will want proof of coverage before closing. If your premium is due within a few months, the lender may collect it in prepaids.
Can I cancel a refinance after closing?
For a refinance of your primary home with a new lender, federal law generally gives you a three-business-day right of rescission after closing, and the loan does not fund until that period ends. The right does not apply to purchase loans. Confirm the exact terms with your lender or an attorney.
The bottom line on refinance fees
Treat Section E as a fixed tax, Sections F and G as your own money moving around, and Sections A through C as the price you are shopping. If the break-even on that price is shorter than the time you expect to keep the loan, pay the fees. If you might move or refinance again within about six years, take the lender credit and keep your cash. This is general information, not financial advice; a licensed loan officer or HUD-approved housing counselor can run the numbers on your loan.
More homeownership bills, priced
- Purchase closing costs, split between buyer and seller
- Homeowners insurance cost and the dials you control
- Home inspection cost and which add-ons you need
- Land survey cost, by type of survey
- Closing costs calculator
The bigger picture: Insurance, Real Estate and Legal Costs in 2027: A Complete Guide
Pricing method: prices were researched in November 2026 for 2027 planning and may change. Fee ranges come from Bankrate’s 2026 refinance cost guide, LodeStar Software Solutions’ 2024 and 2025 refinance closing cost studies, CFPB analysis of 2023 HMDA data, Fannie Mae appraisal-waiver estimates and Freddie Mac’s weekly rate survey. The sample Loan Estimate is a hypothetical illustration. See our disclaimer.
